Retail supply chain and procurement optimization increases profitability
The retail industry is unlike any other. Its direct engagement with consumers differentiates it from manufacturing-focused sectors that are fixated on production and distribution. Retail’s strength therefore lies in swift responsiveness to ever-changing trends and market dynamics. Unlike industries with longer product lifecycles, retailers need to remain fluid and adaptable. To keep pace with evolving customer demands, it’s crucial for retailers to have efficient processes, clearly structured assortment planning, flexibility in category management, and competitive sourcing prices. As seasoned experts in retail management consulting, we possess the expertise needed to assist you in achieving these objectives.
Our 20 years of retail supply chain and procurement experience with over 70 international clients spans the whole sector ranging from food and non-food for brands and private labels to needs in indirect procurement (“Goods not for Resale”).
Where our retail management consulting can help you
Strategically structured assortments are crucial in retail to differentiate from the competition and to retain customers. With our proven optimization approaches for category management, we support you in acquiring customers and increasing the value of the average purchase value with a holistic range design.
The basis of successful brand negotiations is professional preparation. This includes in-depth supplier analysis and the calculation of potentials as well as the selection of negotiation strategies and the setting of a maximum and minimum target. We provide your procurement staff with a tried and tested toolset and support them with training so that they are optimally prepared for annual negotiations in the future and can improve the results in the long term.
Own brands are a challenging field for procurement. On the one hand, they have to be cheaper than branded products, but on the other hand they have to meet quality expectations in order to win customers over. For the retailer, private labels must increase the company’s average selling margin. For these reasons, private label sourcing is an elementary part of today’s procurement function.
To meet all requirements, we support your procurement:
- In the standardization and specification
- In the preparation and realization of (online) auctions
- In the qualification and further development of suppliers
- In process optimization
Knowledge transfer is possible both through targeted further training in procurement and through on-the-job training by working together with our experts.
The right choice of suppliers and sourcing channels can lead to a significant competitive advantage. The globalization of supply chains has helped European companies to become more efficient in recent years. But as current crises worsen and EU regulations are becoming more and more effective, the risks are becoming clearer. For this reason, sourcing strategies should be questioned, and nearshoring and regionalization alternatives considered.
Inconsistent standards, political and legal differences and communication barriers can make it difficult to tap into global sourcing markets. This is particularly the case when sourcing activities in Asia are managed from Europe.
With our office in Shanghai, we support you in opening up Asian procurement markets, identifying suitable suppliers and establishing stable retail supply chains. The aim is to reduce your procurement costs while maintaining product quality.
Customers are increasingly demanding it, politicians are passing legislation for it, and the long-neglected protection of climate, environment and human rights requires it:
Sustainability is gaining importance across the retail industry and sales of ecologically and fairly produced products are increasing. In addition, national (e.g. Germany Supply Chain Act) and European legislations (Corporate Sustainability Due Diligence Directive, called “CSDDD”) oblige companies to comply with environmental and human rights standards.
As experts in procurement and supply chains, we know that procurement plays a central role in the realization of sustainability goals within retail supply chains. You can find out here. what framework conditions companies need to create so that their procurement can fulfil this role.
Indirect requirements – or “goods not for resale” such as shop design, marketing, IT or facility management – are often procured by the specialist departments without the involvement of professional buyers. The result: without the buyer’s expertise, too much is often bought at too high a price – especially if the departments work in a decentralized way. This reduces profitability. KGM Strategy has more than 20 years of experience optimizing the procurement of indirect spend in numerous companies. In most projects, shopfitting plays a special role, because the shops are the customers’ immediate touchpoints; they convey brand character, image and value.
Find out more about indirect procurement on our dedicated expertise page.
In order to remain competitive, the question is no longer whether a company digitizes processes, but rather how. Digitalization makes companies more efficient and helps them to effectively achieve their goals.
Our digitalization experts support you in incorporating digital tools into your procurement function. Find out how we can help you with the digital transformation of your procurement on our digitalization pages.
PROCUREMENT: LET’S GET REAL!
Our Experts on Brand Negotiation
Discover our retail management consulting references
Explore our diverse range of retail procurement case studies, each offering valuable insights into strategic practices. Discover real-life scenarios tailored to various focuses within the industry. For more, visit our cases section.